THE BOURSE WHISPERER: Gold Road Resources (ASX: GOR) has completed a Scoping Study into the development of the company’s Gruyere gold project in Western Australia.
The Gruyere project comprises a large-scale open pit mine, a narrow vein underground mine at Central Bore and a conventional 5 million tonnes per annum (Mtpa) Carbon In Leach (CIL) processing facility (7.5Mtpa and 10Mtpa scenarios were also investigated by the study).
Gold Road claims the study has demonstrated Gruyere, based on key metrics and projections and estimates at $1,350 per ounce, to be an economically robust gold project.
The company anticipates average gold production of 190,000 ounces to be recovered per annum over an 11 year life of mine (LOM) for 2.1 million ounces total production.
This is expected to generate gold revenue of $2.8 billion over LOM with the possibility of further upside based on recent gold price increase.
The study has determined average cash costs of $838 per ounce and all-in sustaining costs of $916 per ounce.
Net pre-tax cash flow is expected to be above $550 million over LOM after all-inclusive pre-production capital costs estimated at $360 million.
More than 70 per cent of the project’s forecast production target is in Measured and Indicated Resource categories.
Location of Gold Road tenements relative to major cities and relevant
infrastructure within the Yilgarn Craton. Source: Company announcement
Gold Road indicated a Pre-Feasibility Study will commence immediately, with Stage 1 to focus on optimal plant size and throughput.
“The release of the Scoping Study is an important milestone for our company,” Gold Road Resources executive chairman Ian Murray said in the company’s announcement to the Australian Securities Exchange.
“It transitions Gruyere from a standout gold discovery to a potentially robust gold mining project.
“This confirms the exceptional qualities of the Gruyere project for mining and processing, and demonstrates the likelihood that Gold Road could become a significant gold producer.”
“The Base Case production scenario has highlighted multiple opportunities to improve the project economics through mine and plant size optimisation, power generation savings and further exploration success from both the Gruyere area and our extensive regional portfolio as well as higher gold prices.
“It is also relatively robust at lower gold price scenarios.”